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MARKET CLOSE: Pumpkin Patch shares plunge on profit downgrade

Thursday 27th January 2011 1 Comment

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Pumpkin Patch shares plunged 10% to an 18-month low today after the children's clothing retailer warned that its annual profit may fall by 37%.

The brutal reaction from the market came after Hallenstein Glasson shares fell 5.85% yesterday when it issued a profit warning. Its shares stabilised today, closing up a cent at $3.87.

Pumpkin Patch (NZX: PPL ) shares closed down 12c, or 7.64%, at $1.45, but traded as low as $1.41.

"Pumpkin Patch are another indication of the tough retail environment out there," said Grant Williamson, director at Hamilton, Hindin, Greene.

"It is disappointing for investors," he said.

Overall, the benchmark NZX-50 index closed down 3.786 points, or 0.113%, at 3350.934. Turnover was worth $47.56 million. There were 30 rises and 40 falls among the 106 shares traded.

Fletcher Building shares remained on trading halt as the local market closed. Crane Group shares were also halted, leading the media to speculate Fletcher Building will lift its bid for the Australian building products company.

Sanford (NZX: SAN ) rose 13c to $5.03 after giving an upbeat presentation on the prospects for its aquaculture investments and fish prices at its annual meeting yesterday, but Mr Williamson said most of the shares traded were a market crossing and volume was thin.

Postie Plus (NZX: PPG ) fell 1c to 27 and The Warehouse (NZX: WHS ) fell 2c to $7.41 but Michael Hill (NZX: MHI ) rose 1c to 91. Kathmandu (NZX: KMD ) fell 3c to $2.13 and Hellaby Holdings (NZX: HBY ) was unchanged at $2.25.

Mainfreight (NZX: MFT ) rose 4c to $8.18, while Air New Zealand (NZX: AIR ) eased a cent to $1.42. Infratil (NZX: IFT ) eased a cent to $1.88.

Telecom (NZX: TEL ) was unchanged at $2.31, as was SkyTV (NZX: SKT ) on $5.30. Contact Energy (NZX: CEN ) fell 3c to $6.19 and TrustPower (NZX: TPW ) fell 3c to $7.19.

Restaurant Brands (NZX: RND ) rose 6c to $2.49 after yesterday telling NZX it continues to comply with its continuous disclosure obligations and is comfortable with the full year profit guidance.

In the US, the S&P 500 closed at a 29-month high on Wednesday led by gains in tech and commodity shares, as investors largely ignored the US Federal Reserve's lukewarm economic assessment.

The stockmarket had little reaction to the Fed, which said high unemployment still justifies a bond-buying programme that has helped equities rally in the last few months.

Strong earnings continue to support further gains in stocks.

The Dow Jones industrial average edged up 8.25 points, or 0.07%, to end at 11,985.44. The Standard & Poor's 500 Index advanced 5.45 points, or 0.42%, to 1296.63. The Nasdaq Composite Index gained 20.25 points, or 0.74%, to 2739.50.



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Comments from our readers

On 28 January 2011 at 10:16 am B.Moers said:
Interesting to see Pumpkin Patch drop so much. They are on track with developing their new stores overseas and are a company that is underlooked by people looking for a solid long term investment. A strong, reputable New Zealand company. The buying is good, get in while the lemmings bail.
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